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Indonesia port probe, Australian cyclone tighten coal supply to Asia

TOP NEWS

Indonesia port disruptions, cyclone in Australia tighten coal supply to Asia, may lift prices

Disruptions at ports in Indonesia due to graft probes and a cyclone crossing Australia's Queensland state that prompted some miners to suspend mines have tightened Asia's coal markets this month, while sustained demand in China and other key markets lifted prices, Reuters reported. Meanwhile, The Australian wrote that coking coal prices could spike as the cyclone disrupted operations at a number of mines in Queensland, representing about one-third of the state's total coal output.

Shandong Gold may have discovered China's largest gold mine

Shandong Gold Group Co. Ltd., the parent company of Shandong Gold Mining Co. Ltd., claimed it discovered what could be the biggest gold mine in China, Bloomberg News reported, citing a statement on a government-supervised website that cited the company.

Brexit begins

The U.K. formally declared its intention today to leave the European Union, starting two years of negotiations to forge a new trading deal between the world's largest customs union and the fifth-largest economy.

DIVERSIFIED

* Rio Tinto CEO Jean-Sebastien Jacques said he is not concerned about the general health of the Chinese economy. The country is taking steps to rationalize its steel industry, from restructuring state-owned enterprises to shutting down small, polluting blast furnaces and concentrating production in facilities with new blast furnaces that require higher grades of iron ore.

BASE METALS

* Indonesian miner PT Antam (Persero) Tbk was granted initial approval to export up to 2.7 million tonnes of nickel ore over the next 12 months, Reuters reported, citing the country's Mineral Enterprise Director Bambang Susigit. A company spokesperson, however, said Antam is still awaiting for the issuance of the official recommendation by the mining ministry.

* Vale SA unit PT Vale Indonesia Tbk. is planning to construct a previously reported US$2 billion ferronickel smelter in Pomalaa, Southeast Sulawesi, The Jakarta Post reported, citing the company's president director, Nico Kanter.

* Jiangxi Copper Co. Ltd.'s full-year 2016 net profit rose 23.6% year over year to 787.5 million Chinese yuan, on the back of effective cost controls and higher metal prices, Reuters reported.

* Mitsubishi Materials Corp. expects to incur a ¥23.9 billion extraordinary loss, as a provision for environmental measures, in the fourth quarter of its fiscal year ending March 31.

* Trevali Mining Corp. raised C$264.5 million through a previously reported bought-deal private placement of subscription receipts, including the full exercise of an overallotment option by the underwriters. Net proceeds are earmarked to help fund a portion of the cash consideration of the US$400 million deal with Glencore Plc.

* BHP Billiton Group's Escondida copper mine in Chile will produce 250,000 tonnes less than the market expected for the year, a deficit initially estimated at 1.21 million tonnes, said mining analyst Gustavo Lagos. The decline is mainly due to the 44-day strike that ended last week, which caused delays in investments and led to a delicate labor climate in the company, daily El Mercurio reported.

* Havilah Resources Ltd. updated the mineral resource estimate for its Kalkaroo copper-gold project to 232.5 million tonnes at 0.49% copper and 0.37 g/t of gold in JORC-compliant measured, indicated and inferred resources, at a 0.4% copper equivalent lower cutoff.

* Cobalt Power Group Inc. signed an option agreement to acquire the Bende and Kingston patented cobalt mining claims, covering 89 hectares in Ontario.

PRECIOUS METALS

* Avesoro Resources Inc.'s gold production guidance for the year is 90,000 ounces to 100,000 ounces at all-in sustaining costs of between US$925 per ounce and US$975 per ounce of gold produced, compared to full-year 2016 total gold production of 63,556 ounces at all-in sustaining costs of US$1,930 per ounce since commercial production started.

* The market is still at an early stage of a bull run for the mining industry and gold in particular, according to Ronald-Peter Stöferle, managing partner with asset management firm Incrementum AG. Stöferle said the tailwinds for gold include inflows for exchange-traded funds picking up, stirring inflation momentum, a portfolio diversification trend among miners and investors, and policy uncertainties around the globe.

* A pipe carrying gold and silver solution ruptured at Barrick Gold Corp.'s Veladero gold mine in Argentina, Reuters reported. The company said the leakage was contained and does not pose any threat to the environment, while authorities are investigating the incident.

* The World Bank's International Centre for Settlement of Investment Disputes ordered OceanaGold Corp. to pay interest over US$8 million in legal costs awarded to El Salvador in October 2016, after the miner's unit lost a lawsuit against the country, Agence France-Presse wrote.

* The Colombian government plans to override the referendum that banned mining in the Cajamarca municipality of Tolima, with Mines and Energy Minister German Arce saying the voting results were not legally binding, BBC News reported. About 98% of the residents in the area voted against AngloGold Ashanti Ltd.'s La Colosa mine, which has already been granted a mining license.

* Luna Gold Corp. secured approval from Supreme Court of British Columbia to merge with JDL Gold Corp. to create a multiasset mining company, named Trek Mining Inc. As all required conditions for the transaction were fulfilled, the deal is now expected to close March 31.

* Petropavlovsk PLC increased the amount of gold in its hedging program to 573,000 ounces at US$1,254 per ounce. A US$100 million gold loan facility was also approved, with final documentation scheduled for April.

* Jubilee Platinum Plc shares rose by over 9% in afternoon trading in London on March 29, after the company announced that platinum concentrate production has begun at its Hernic tailings project in South Africa.

* Orvana Minerals Corp. made the first commercial shipment of gold-silver doré after recently recommissioning the carbon-in-leach circuit at its Don Mario mine in Bolivia.

* Intermin Resources Ltd.'s scoping study for its Goongarrie Lady gold project in Western Australia estimated recovery of 14,700 ounces at all-in costs of A$1,081 per ounce, using a base case gold price of A$1,600 per ounce and a mineral resource estimate of 272,000 tonnes at 2.86 g/t of gold for 25,028 ounces, at a 1 g/t cutoff grade.

BULK COMMODITIES

* The recent strengthening in iron ore price prompted the restart of a number of small, high-cost Chinese mines, according to Tracy Liao, Citigroup's Asia commodities strategist. "In China, what we saw on the ground was a lag of reaction between iron ore price hike and the decision to restart iron ore mines by around three to six months," Liao told attendees at the Global Iron Ore and Steel Forecast conference in Perth, Australia.

* Backed by South African Chamber of Mines President Mike Teke, Masimong Minerals (Pty) Ltd. is said to have emerged as the lead bidder during the auction for some of Anglo American Plc's South African coal mines, Bloomberg News reported, citing "two people familiar with the matter."

* Teck Resources Ltd. has not agreed to the contract price for steelmaking coal for the second quarter of 2017, as the market awaits the outcome of the cyclone event in Australia, but expects sales to be at least 6.8 million tonnes and site costs in the range of C$47 per tonne to C$51 per tonne.

* BHP Billiton is likely to go ahead with its South Flank iron ore development in Western Australia now that the state's new Labor government has ruled out any potential tax increase on iron ore leases. Edgar Basto, asset president of BHP Billiton's Western Australian iron ore operations, told reporters on the sidelines of the Global Iron Ore and Steel Forecast conference in Perth, Australia, that newly appointed Premier Mark McGowan had reassured the company that no new taxes will be introduced.

* BHP Billiton said the Hay Point coal terminal is not operational and the Goonyella Riverside, Peak Downs, Daunia, South Walker Creek and Poitrel coal mines remain suspended for now amid wet weather in Queensland, Australia, following a tropical cyclone, The Australian reported. Meanwhile, operations at the Broadmeadow, Caval Ridge and Saraji mines have been slowed. Aurizon Holdings has declared force majeure at three of its four coal-rail systems in Queensland amid rough weather stemming from Cyclone Debbie.

* Operations remain suspended at Glencore's Collinsville and Newlands mines in central Queensland, but the mines plan to return to production over the next 48 hours. The company does not anticipate any impact on annual production guidance, The Sydney Morning Herald reported. Meanwhile, operations at Townsville copper refinery have also resumed.

* Coal mining operations were halted at Stanmore Coal Ltd.'s Isaac Plains mine and Realm Resources Ltd.'s Foxleigh mine due to a large cyclone that brought wind and rain to Queensland, Australia. Stanmore said its port provider declared force majeure to protect key assets and infrastructure, while Realm has substantial production coal stock, which will assist in restarting supply.

* Heavy rainfall in Queensland, Australia, prompted Yancoal Australia Ltd. to declare force majeure on its Middlemount coal joint venture with Peabody Energy Corp., Metal Bulletin reported. Output at the company's Yarrabee mine has also been affected by rain.

* Moody's said the completion of the sale of Vale's interest in the Moatize coal mine and in the Nacala Logistics Corridor to Mitsui & Co. Ltd., resulting in US$733 million in proceeds to the mining major, improved its liquidity and is credit positive.

* Rio Tinto expects its AutoHaul project to become fully functional by the end of 2018, Mining Weekly reported, citing a company executive. Each of the autonomous haul trucks at its Pilbara iron ore operations operated at 15% lower costs during 2016 than conventional haul trucks.

* Vedanta Resources Plc Chairman Anil Agarwal said he likes Anglo American's current management team and has no designs on a board seat or leadership position but wants to help the company expand its presence, particularly in India. Meanwhile, Bloomberg News quoted Agarwal as saying he has no plans to acquire Anglo's South African mines.

* Brazilian steelmaker Gerdau SA entered an agreement to form a joint venture with Putney Capital Management in Colombia. The company will sell 50% of its stake in the Gerdau Diaco mill to Putney Capital.

* The Indonesian government's plans to boost domestic coal consumption and curb production of the commodity will weigh on exports from the country, which is the largest coal exporter in the world, according to Hendra Sinadia, deputy executive director of the Indonesian Coal Mining Association.

* India's coal ministry has proposed offering reserves of 30 million tonnes to miners through the reverse auction route to kick start commercial mining in the country, Mining Weekly reported. The country is also planning to offer free pricing and revenue sharing contracts to investors securing coal blocks via auction.

* The Competition Commission of India said the proposed merger between Canadian fertilizer producers Agrium Inc. and Potash Corp. of Saskatchewan Inc. will likely have an adverse effect on competition, Reuters reported, citing a government statement.

SPECIALTY

* A definitive feasibility study for the first stage of Lithium Americas Corp.'s Cauchari-Olaroz lithium project in Argentina estimated construction CapEx of US$425 million, with payback in three years and five months.

* Orocobre Ltd. entered into a deal to off-load its Salinas Grandes lithium exploration properties in Argentina's Salta and Jujuy provinces to LSC Lithium Ltd.

* Lithium Australia NL has freed its off-market takeover offer for Lepidico Ltd. from the defeating conditions. The offer is expected to close April 18.

* Deep Yellow Ltd. entered a deal with JOGMEC in which the latter can earn a 39.5% interest in the Nova joint venture, comprising exploration prospecting license 3669 and 3670, in Namibia. The licenses cover about 600 square kilometers and adjoin Deep Yellow's wholly owned Reptile uranium project.

* Pilbara Minerals Ltd. secured a right to earn up to an 80% interest in the Mount Francisco lithium-tantalum project in Western Australia from Atlas Iron Ltd.

INDUSTRY NEWS

* Now that the U.K. has filed for divorce, the EU is keen to ensure that its former partner continues to pay its share of the bills. But European parliamentarians have also left the door open to a looser-binding future agreement along the lines of a deal with Ukraine, which could allow a high degree of continued access to the single market.

* More change is on the horizon for global mining companies, a market that's seen its share of flux and volatility in recent years, outgoing Anglo American Chairman John Parker said. He added that the industry has been somewhat slow to embrace digitization and automation to boost productivity and improve operations, but it will have to, and soon.

* The president of the Federal Reserve Bank of San Francisco said he "would not rule out" the prospect of more than three rate increases in 2017.

* Following a recent ban by the Tanzanian government on exports of gold and copper concentrates, President John Magufuli called for a special audit of mining companies to verify if they pay their fair share of taxes, Reuters reported.

* El Salvador's Congress passed a law, prohibiting all metal mining projects, including open pit and underground, in a bid to protect the country's environment and natural resources, Reuters reported.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.